Resolving The Mortgage Arrears Crisis – Volume 2/2016

This briefing summarises recent legislation, cases and trends relevant to ongoing efforts to resolve the mortgage arrears crisis. Mortgage arrears and repossessions are a key area of focus in the 2016 Programme for Government.

RECENT LEGISLATION

Variable Mortgage Rates

Fianna Fáil has proposed a bill (the Central Bank (Variable Rate Mortgages) Bill 2016) similar to a bill previously proposed by it in March 2015, and it has progressed to Committee Stage. The Bill proposes:

• quarterly assessments: the Central Bank will be required to carry out quarterly assessments on competition in the market for PDH loans; and
• caps on rates: if, following a quarterly assessment, the Central Bank believes that a "market failure" exists (i.e. lenders are charging higher variable rates than the Central Bank believes to be "reasonably and objectively justified" by reference to a list of factors), the Central Bank may cap the variable rates charged by those lenders.